Research Detail
| 2024/10/23 / Erste Group Research |
Interest rate expectations weigh on the Euro From the beginning of the second half of the year until the end of September, the euro strengthened against the US dollar. The driving force was the expectation of a faster and more significant easing of monetary policy by the US Federal Reserve compared to the European Central Bank. Published US labour market data at the beginning of October abruptly changed the picture. This led to a reduction in expectations regarding the extent of the US interest rate cut cycle. A surprise interest rate hike by the Bank of Japan (BOJ) at the end of July, in conjunction with falling interest rate expectations in the US, led to an abrupt strengthening of the yen not only against the US dollar, but also against the euro. The unexpectedly sharp movement in the yen was likely due to a rapid unwinding of carry trades. Despite two interest rate cuts by the Swiss National Bank (SNB) since June, the CHF appreciated by 3% against the EUR in the second half of the year. This was due less to a strength in the Swiss economy than to the broad-based weakness in growth in the eurozone. |
 Download PDF (272kB)
|
General information
| Author | Erste Group Research |
| Date | 2024/10/23 |
| Language |  |
| Product name | Forex News |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | Eurozone, Switzerland, United States |
| Currency in focus | Euro, Swiss Franc, US Dollar |
| Sector in focus | - |
| Download |
